One of the issues that many people face when they make a big purchase is they often don't understand all of the costs that may be involved once they make that purchase.

Take your first car as an example....once you buy it, you have to insure it, maintain it, fill it up with gas and even wash it once in a while.  For some, the annual costs of keeping the car on the road can often exceed the costs of the car payments themselves!

For some, they are only concerned about the upfront costs of the vehicle.....they simply go for the lowest cost.  It may be that they simply cannot afford more, but for some, they try to save money even when they do not have to.  What they often find out is that lower costs cars are often cheaper because they are lacking in part quality or build quality. Worse yet, they may have poor fuel economy and higher than usual maintenance costs. In most cases, this "after-sale" cost burden negates much (or all) of the initial price advantage that they achieved.

The same holds true when it comes to deploy cellular modems.  First, let's look at the three different cost areas of deploying a cellular modem:

1.    The costs for "getting the modem in the field" including hardware, accessories and installation costs.

2.    The on-going costs for the cellular network and other carrier services.

3.    The costs for maintaining the device in the field including the costs of unplanned downtime.

Costs of getting the modem in the field

A large part of this cost can be from the modem itself.  However, people often underestimate the cost of an installation, especially in area of lower cellular coverage.  If you are getting "5 bars" of coverage, then the most basic antenna will likely suffice, which keeps the costs down low.  However, even in urban areas, coverage issues can crop up for way too many reasons.  It could be that there is a lot of building material between you and the cell tower....it could be that there is a significant source of interference....or it could be that you are trying to deploy four floors below ground.  Regardless, this can affect your installation costs.  On top of having to use more expensive antennas, cabling and labor costs can be quite high.

On-going cellular network costs

I'm not going to comment on which carrier is best here in this blog.  What I am going to say is that you need to consider which carrier is best for you.  Who provides the best rate plans to meet your particular needs (maybe you need pooling, more data in different times of the day/year or maybe you need better roaming).  You need to do your due diligence to see that the offering meets your needs both now and in the future.

Part of this exercise means you need to consider some of the services that are offered.  I have seen more than a few people balk at the idea of paying a monthly charge (as well as a setup charge) for a Private IP infrastructure.  Then....they find out that a wild data overage spike (or worse) a hacked device costs them a factor of 10x more than they would have spent on the Private IP.

As well, a lot of people balk at the idea of paying for a Static IP, and I do agree, not everyone needs one.  However, if you have to drive out to a site to perform updates as the device has changed IP addresses (and you don't know the new one), it costs you dearly.  And, yes, I am aware of many IP change notification and Dynamic DNS services....they work, but not as well as a static IP.

On-going maintenance costs

This is the one that no one thinks about....until it is too late.  You know that you have to pay for the hardware (or if you are getting it free, pay more on your cellular network bill) and you have to pay for on-going cellular costs.  However, many companies do not factor in what it costs to maintain these devices.

Imagine this scenario (for some, you have been through the horror and do not have to imagine)...you have 1,000 modems in the field and you are told you need to update to a new firmware to compensate for a security flaw.  How do you update them?  With most modems, you are doing this on a one-by-one basis.  That cost would be in the 10's of dollars, assuming that you were able to do them over the air at all.  Enterprise Management tools do cost money upfront, but generally pay for themselves many times over.

How about modems that go off-line?  This is the most important line I have ever written about modems....If you try to cheap out on buying an inferior modem for an important application, you will end up paying many times more than you saved in after-care support costs.  It is just a fact.  What is the cost when your modem fails?

There is a reason why premium modems are worth the premium.  First, they do not require on-site visits, which can save you money.  Equally important, they last longer.  You will need to buy an inferior modem 1.5 to 2.5x more often than a premium one.  So, for the most part, this alone more than balances out the cost difference.....but it gets better.  What does it cost you to install a modem?  You also have to factor in 1.5 to 2.5x more installation charges and downtime costs than a premium modem.

Bottom line

As someone who may be in charge of purchasing modems or choosing one for your customers, you will have a lot of choices and a lot of variables.  You need to factor in all three costs (upfront hardware/setup, on-going carrier and on-going maintenance) into your calculations to understand the true costs of a modem deployment.  After you do that, you will see that many upfront costs (such as key services and the premium for a better modem) can pay for themselves many times over.

As always, Novotech is ready to assist with your M2M needs. Whether you’re looking to control, track, monitor or back-up, Novotech has the solutions and products you need. View our Line Cards and let us know how we can be of assistance.

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